The following table reports the percentage of stocks in typical portfolio in the nine quarters from 2005-2007.
A Use exponential smoothing to forecast this time series. Consider smoothing constants of a=.2, .3 amd .4 What the value of the smoothing constant provides the best forecast.
B. What is the forecast of the percentage of stocks in a typical portfolio for the the second quarter of 2007.
The solution illustrates the application of Exponential smoothing technique to forecast a time series. Response includes a Word and Excel document.